Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the iShares Russell 2000 Value ETF (
IWN Quick Quote IWN - Free Report) is a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $12.09 billion, making it one of the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.24%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.89%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 27.70% of the portfolio. Industrials and Real Estate round out the top three.
Looking at individual holdings, Usd Cash (
USD Quick Quote USD - Free Report) accounts for about 0.58% of total assets, followed by Southstate Corp ( SSB Quick Quote SSB - Free Report) and Stag Industrial Reit Inc ( STAG Quick Quote STAG - Free Report) .
The top 10 holdings account for about 4.56% of total assets under management.
Performance and Risk
IWN seeks to match the performance of the Russell 2000 Value Index before fees and expenses. The Russell 2000 Value Index measures the performance of the small-capitalization value sector of the U.S. equity market.
The ETF has lost about -12.11% so far this year and is down about -5.37% in the last one year (as of 07/28/2022). In the past 52-week period, it has traded between $134.47 and $176.88.
The ETF has a beta of 1.15 and standard deviation of 31.82% for the trailing three-year period, making it a medium risk choice in the space. With about 1429 holdings, it effectively diversifies company-specific risk.
IShares Russell 2000 Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWN is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares S&P SmallCap 600 Value ETF (
IJS Quick Quote IJS - Free Report) and the Vanguard SmallCap Value ETF ( VBR Quick Quote VBR - Free Report) track a similar index. While iShares S&P SmallCap 600 Value ETF has $7.31 billion in assets, Vanguard SmallCap Value ETF has $23.26 billion. IJS has an expense ratio of 0.18% and VBR charges 0.07%. Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit
Zacks ETF Center.